DESARROLLO DE LA ENERGÍA GEOTÉRMICA EN EL MUNDO

Holcim, a global cement producer, tracks its performance in relation to its voluntary corporate target using a GHG balance sheet. This balance sheet shows, for each commitment period and for each country business, on one side the actual GHG emissions and on the other side the GHG “assets” and “instruments.” These assets and instruments consist of the voluntary GHG target itself (the “voluntary cap”; in other words, the allowances that Holcim provides for itself), a regu- latory target (“cap”) if applicable, plus the CDM credits purchased (added) or sold (subtracted), and any regulatory emissions trading allowances purchased (added) or sold (subtracted). Thus if any country business sells CDM credits (generated at sources inside the voluntary target boundary), it is ensured that only the buying organization counts the credit (see first example of double counting in step 8).

At the end of the commitment period, every country business must demonstrate a neutral or positive balance towards Holcim’s

target. Those companies whose voluntary cap overlaps with a regulatory cap (e.g., in Europe) must also demonstrate a neutral or positive balance towards the regulatory cap. GHG reductions in Europe are thus reported towards both targets (see second example of double counting in step 8).

Both sides of the country business balance sheets are consoli- dated to group level. Credits and allowances traded within the group simply cancel out in the asset column of the consoli- dated corporate level GHG balance sheet. Any credits or allowances traded externally are reconciled with both the voluntary and regulatory caps at the bottom line of the asset column of the balance sheet. This ensures that any sold allowance is only counted by the buying organization (when Holcim’s target and that of the buying organization do not overlap). A purchased allowance or credit is counted towards both the voluntary and regulatory targets of the European busi- ness (these two targets overlap).

G H G A S S E T S & I N S T R U M E N T S

Voluntary cap (direct emissions) Regulatory cap (direct emissions) Reg. allowances purchased (+) or sold (-) CDM credits purchased (+) or sold (-)

Sum of voluntary cap, reg. allowances & credits Sum of regulatory cap, reg. allowances & credits

Voluntary cap

CDM credits purchased (+) or sold (-) Sum of voluntary cap & credits

Sum of voluntary cap, reg. allowances & credits

G H G E M I S S I O N S

Emissions, direct, indirect + biomass

Sum of direct emissions

Sum of direct emissions, according to EU ETS

Emissions, direct, indirect + biomass

Sum of direct emissions

Sum of direct emissions

Holcim Group Holcim (country A in Europe)

Holcim (country X in Latin America)

• Considering whether there are any existing environmental or energy plans, capital investments, product/service changes, or targets that will affect GHG emissions. Are there plans already in place for fuel switching, on site power generation, and/or renewable energy investments that affect the future GHG trajectory?

• Benchmarking GHG emissions with similar organizations. Generally, organizations that have not previously invested in energy and other GHG reductions should be capable of meeting more aggres- sive reduction levels because they would have more cost-effective reduction opportunities.

10. Track and report progress

Once the target has been set, it is necessary to track performance against it in order to check compliance, and also—in order to maintain credibility—to report emissions and any external reductions in a consistent, complete and transparent manner.

• C A R R Y O U T R E G U L A R P E R F O R M A N C E C H E C K S . In order to track performance against a target, it is important to link the target to the annual GHG inventory process and make regular checks of emissions in relation to the target. Some companies use interim targets for this purpose (a target using a rolling target base year automatically includes interim targets every year).

• R E P O R T I N F O R M A T I O N I N R E L A T I O N T O T H E T A R G E T.

Companies should include the following information when setting and reporting progress in relation to a target:

1. Description of the target

• Provide an outline of the target boundaries chosen

• Specify target type, target base year, target completion date, and length of commitment period

• Specify whether offsets can be used to meet the target; if yes, specify the type and amount

• Describe the target double counting policy

• Specify target level.

2. Information on emissions and performance in rela- tion to the target

• Report emissions from sources inside the target boundary separately from any GHG trades

• If using an intensity target, report absolute emis- sions from within the target boundary separately, both from any GHG trades and the business metric

• Report GHG trades that are relevant to

compliance with the target (including how many offsets were used to meet the target)

• Report any internal project reductions sold or transferred to another organization for use as an offset

• Report overall performance in relation to the target.

GUIDANCE

1 _{Some companies may formulate GHG efficiency targets by formulating}

this ratio the other way around.

2 _{Examples include the U.K. ETS, the CCX, and the EU ETS.}

3 _{Holcim’s and Lafarge’s target have been formulated using the termi-}

nology of the WBCSD Cement CO2 Protocol (WBCSD, 2001), which uses“specific” to denote emissions per tonne of cement produced.

4 _{It is possible to use an interval other than one year. However, the longer}

the interval at which the base year rolls forward, the more this approach becomes like a fixed target base year. This discussion is based on a rolling target base year that moves forward at annual intervals.

5 _{Note that simply adding the yearly emissions changes under the rolling}

base year yields a different result from the comparison over time made with a fixed base year, even without structural changes. In absolute terms, an X% reduction every year over 5 years (compared to the previous year) is not the same as an (X times 5) reduction in year 5 compared to year 1.

6 _{Depending on which recalculation methodology is used when applying}

the rolling base year, the comparison over time can include emissions that occurred when the company did not own or control the emission sources. However, the inclusion of this type of information is mini- mized. See also the guidance document “Base year recalculation methodologies for structural changes” on the GHG Protocol website (www.ghgprotocol.org).

7 _{For further details on different recalculation methodologies, see the}

guidance document “Base year recalculation methodologies for struc- tural changes” on the GHG Protocol website (www.ghgprotocol.org).

8 _{As noted in chapter 8, offsets can be converted to credits. Credits are}

thus understood to be a subset of offsets. This chapter uses the term offsets as a generic term.

9 _{For the purposes of this chapter, the terms “internal” and “external”}

refer to whether the reductions occur at sources inside (internal) or outside (external) the target boundary.

10_{This equivalence is sometimes referred to as “fungibility.” However,}

“fungibility” can also refer to equivalence in terms of the value in meeting a target (two fungible offsets have the same value in meeting a target, i.e., they can both be applied to the same target).

11_{Overlap here refers to a situation when two or more targets include the}

same sources in their target boundaries.

12_{Similarly, company A in this example could be subject to a mandatory}

cap on its direct emissions under a trading program and engage in trading allowances covering the common sources it shares with company B. In this case, the example in the section “Double counting of allowances traded in external programs” is more relevant.

13_{The energy efficiency measures implemented by company C may not}

always result in an actual reduction of company B’s emissions. See chapter 8 for further details on reductions in indirect emissions.

his appendix provides guidance on how to account for and report indirect emissions associated with the purchase of electricity. Figure A–1 provides an overview of the transactions associated with

purchased electricity and the corresponding emissions.